KFC judge tries to smooth ruffled feathers

Jack Cowin, who holds 46 KFC outlets in WA, has gone to court in a bid to stop Yum! Restaurants from closing 15 of those stores by March 28, 2012, when their franchise licences were due to expire.
Photo: Peter Rae

A courtroom showdown between a KFC franchisee and the global owner of the fried chicken brand has been averted after both sides agreed to mediation.

Federal Court Justice Geoffrey Flick on Friday told businessman Jack Cowin's Competitive Foods Australia and Yum! Restaurants they had 45 days to find a solution to their dispute through compulsory mediation.

Mr Cowin, who holds 46 KFC outlets in WA, has gone to court in a bid to stop Yum! Restaurants from closing 15 of those stores by March 28, 2012, when their franchise licences were due to expire.

Justice Flick said those franchise licences would now be extended to September.

Competitive Foods had said closing those stores would have resulted in 600 job losses.

Mr Cowin, who is worth about $618 million according to the BRW rich list, said in a written submission to the court Competitive Foods had been trying to sell the KFC outlets but Yum! had frustrated that process.

Competitive Foods had claimed Yum! had been unreasonable in the way it dealt with it and potential purchasers of the KFC stores, meaning it would have been impossible to sell them as a going concern.

Yum!, which owns the global rights to the KFC, Pizza Hut and Taco Bell brands, rejected the allegations.

"The claims being made are baseless and without merit," Yum! chief corporate affairs officer in Australia Sally Glover told Fairfax Media on Wednesday, March 21 this year.

The parties were due to return to court for a hearing on August 17.

And if they cannot resolve their differences, a three-week trial was set to begin on September 3.